Changes to the Mortgage Interest Deduction ostensibly made the housing subsidy more progressive. The real consequences of the change, however, make the deduction "significantly more inequitable that it was in years past."
One of the most consequential changes included in the GOP tax reform bill signed by President Trump at the end of 2017 targeted the Mortgage Interest Deduction.
Writing for Greater Greater Washington, David Meni explains the consequences of the change for tax revenue and the demographics of the Mortgage Interest Deduction:
A recent report by the Joint Committee on Taxation (a non-partisan arm of Congress, like the Congressional Budget Office) shows that while the recent tax bill will shrink the MID considerably, it also will cause the program to give even an even larger share to the wealthiest homeowners.
The cause of this regressive shift of the deduction's benefit is because so many more middle class taxpayers will shift to the standard deduction. "Last year, about 4% of the MID went to households making more than $1 million a year. With the changes to the rest of the tax code, those households now take close to 10% of the deduction," according to Meni.
Read the full story: Surprise! The Mortgage Interest Deduction is now even more of a handout to the wealthy
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